The USD Index (DXY), which tracks the greenback vs. a basket of its main rival currencies, resumes the downtrend and trades at shouting distance from monthly lows near 103.30 on turnaround Tuesday.

USD Index looks at US CPI, Fed

The index slips back to the lower end of the recent range and leaves behind two consecutive daily advances on Tuesday on the back of the firmer tone in the risk complex and ahead of the publication of crucial US inflation figures for the month of May.

On the latter, investors expect the disinflationary pressures to have remained unchanged during the last month, which in turn underpins the most likely pause in the Fed’s tightening campaign.

So far, FedWatch Tool sees the probability of an impasse at the FOMC event on Wednesday at nearly 76%, while a 25 bps rate hike remains the preferred scenario at the July 26 gathering.

Other than the Inflation Rate, the US docket includes the NFIB Business Optimism Index.